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Spirit AeroSystems (SPR) Q3 Earnings Top, Revenues Slump Y/Y

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Spirit AeroSystems Holdings, Inc. (SPR - Free Report) reported third-quarter 2020 adjusted loss of $1.34 per share, narrower than the Zacks Consensus Estimates of a loss of $1.65. In the third quarter of 2019, the company had reported adjusted earnings of $1.38 per share.

Barring one-time adjustments, the company incurred GAAP loss of $1.50 per share against earnings of $1.26 in the year-ago quarter.

Highlights of the Release

Total revenues of $806 million beat the Zacks Consensus Estimate of $772 million by 4.5%. However, the top line plunged a massive 58% from $1,920 million in the year-ago period. The decline in revenues was primarily due to significantly lower 737 MAX production resulting from program grounding and also the impacts of COVID-19 pandemic.

Backlog at the end of third-quarter 2020 was $40 billion, lower than $41 billion in the prior quarter.

Spirit Aerosystems Holdings, Inc. Price, Consensus and EPS Surprise

Spirit Aerosystems Holdings, Inc. Price, Consensus and EPS Surprise

Spirit Aerosystems Holdings, Inc. price-consensus-eps-surprise-chart | Spirit Aerosystems Holdings, Inc. Quote

Segment Performance

Fuselage Systems: Revenues in the segment declined 58% year over year to $421 million from $1,005.3 million registered in third-quarter 2019, primarily due to lower production volumes of Boeing 737 and 787, and Airbus A350 programs.

Propulsion Systems: The segment recorded revenues of $170.8 million in the reported quarter, down 67.2% from $520.9 million a year ago. The downside can be attributed to lower production volumes on the Boeing 737 program.

Wing Systems: Revenues in the segment deteriorated 57% to $168.3 million from $391 million in the prior-year quarter. The downside was primarily due to lower production volumes on the Boeing 737 and Airbus A320 and A350 programs.

Operational Highlights

Total operating costs and expenses declined 42.6% year over year to $983.2 million on account of lower cost of sales; decreased selling, general and administrative expenses; and reduced research and development expenses.

The company incurred an operating loss of $176.9 million in the third quarter of 2020 against operating earnings of $206.1 million in the prior-year quarter.

Financial Position

As of Oct 1, 2020, Spirit AeroSystems had $1,441.3 million in cash and cash equivalents compared with $2,350.5 million as of Dec 31, 2019.

At the end of the first nine months of 2020, long-term debt totaled $2,659 million compared with $2,984.1 million at the end of 2019.

Net cash used in operating activities came in at $612.8 million at the end of third-quarter 2020 against net cash inflow of $718.6 million at the end of third-quarter 2019.

Capital expenditures totaled $19 million during the third quarter, down from $41 million in the prior-year quarter.

Zacks Rank

Spirit AeroSystems has a Zacks Rank #4 (Sell).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Some Q3 Defense Releases

Lockheed Martin (LMT - Free Report) reported third-quarter 2020 earnings from continuing operations of $6.25 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 3%.

Hexcel (HXL - Free Report) reported third-quarter 2020 loss of 29 cents per share against the Zacks Consensus Estimate of earnings of 7 cents. The bottom line also declined from the prior-year quarter’s earnings per share of 90 cents.

Teledyne (TDY - Free Report) reported third-quarter 2020 adjusted earnings of $2.48 per share, which surpassed the Zacks Consensus Estimate of $2.40 by 3.3%.

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